ERYC Discretionary Grant Eligibility Criteria

ERYC Discretionary Grant Eligibility Criteria

East Riding of Yorkshire Council – Discretionary Grant Scheme
Phase One
Introduction
This document sets out phase one of the East Riding of Yorkshire Council’s qualifying criteria
for the Local Discretionary Grant Scheme, announced by Government on 1 May 2020. The
scheme is aimed at small and micro businesses and charities who were not eligible for the Small
Business Grant Fund or the Retail, Leisure and Hospitality Grant Fund. The Discretionary
Grant Scheme is funded by Government and the total amount available for each local authority
to spend is capped at pre-set levels.
The Council recognises that the sustainability of small and micro businesses is crucial for the
recovery to a vibrant economy within the East Riding of Yorkshire. In turn, a vibrant local
economy supports the health and wellbeing of residents. The charitable sector also plays a key
role in health and wellbeing, as well as supporting our vulnerable residents. This scheme
therefore reflects three of the Council’s key priorities: Growing The Economy, Promoting
Healthy Lifestyles, and Protecting The Vulnerable.
The Council will implement the Grant Scheme in two phases. Phase one will deliver grants to
businesses identified as priorities in the Government’s guidance. Phase two will target those
businesses who did not qualify in phase one and who the Council has identified as a local
priority, should (and only if) sufficient funds remain after phase one has been completed.
Section A: Qualifying Criteria
All applicants will need to meet the following criteria specified below in this section:
1. Business size
1.1 Applicants for Phase One of the Local Authority Discretionary Grant Scheme (the grant
scheme) must be either a small or micro business, as defined in Section 33 Part 2 of the
Small Business, Enterprise and Employment Act 2015 and the Companies Act 2006. If an
applicant is not classified as a small or micro business under this definition, they will not
be eligible.
1.2 All applicants for the grant scheme will be assessed based on which businesses category,
small or micro, they fall under.
1.3 A small business is defined in the Companies Act 2006 and must satisfy at least two of the
following three requirements:
• A turnover of not more than £10.2 million
• A balance sheet total of not more than £5.1 million
• A headcount of staff of less than 50
1.4 A micro business is defined in the Companies Act 2006 and must satisfy at least two of the
following three requirements:
• A turnover of not more than £632,000
• A balance sheet total of not more than £316,000
• A headcount of staff of not more than 10
1.5 Applicants can be Sole Traders, Private Limited Companies (LTDs), Publically Limited
Companies (PLCs) and Partnerships, including Limited Liability Partnerships (LLPs).
2. Trading requirements and eligibility
2.1 All applicants must have been actively trading on 11 March 2020.
2.2 Applications from insolvent companies, companies in liquidation or companies in
administration, will not be accepted.
2.3 Applications from Partnerships which are being dissolved, or have been dissolved, will not
be accepted.
2.4 Applications from bankrupt sole traders will not be accepted.
2.5 Applications from a business which is the subject of a striking-off notice will not be
accepted.
2.6 The Discretionary Grant Fund is for those businesses that are not eligible for other
support schemes for businesses. Businesses which have received cash grants from any
other central government COVID-related scheme are ineligible for funding from the grant
scheme. Such schemes include but are not limited to:
• Small Business Grant Fund (provided to businesses in receipt of Small Business Rates
Relief or Rural Rates Relief)
• Retail, Hospitality and Leisure Grant
• The Fisheries Response Fund
• Domestic Seafood Supply Scheme (DSSS).
• The Zoos Support Fund
• The Dairy Hardship Fund
3. Property costs
3.1 All applicants will need to demonstrate that they have high and on-going fixed property
costs.
3.2 The types of costs that are considered to be on-going fixed property costs are:
• Mortgage payments owed to a financial institution regulated by the Financial Conduct
Authority
• Rent payments owed as a result of a contractual obligation though a tenancy agreement
or licence to occupy
• Rent payments owed as a result of non-contractual obligations but where it can be
demonstrated that there is an agreement to pay in place and that agreement was
operational on 11 March 2020, was legitimate, valid and continues to be so.
• A business rates liability, but only where that business rates liability is calculated using a
rateable value that is less than £51,000
3.3 Business whose property costs, as defined in section 3.2, are greater or equal to £51,000
per annum are ineligible for phase one of the grant scheme.
4. Types of businesses that can apply
4.1 The Government has identified that the following types of businesses should be prioritised
for distribution of the discretionary grant fund and these correspond with small and micro
businesses in the East Riding that have been unable to access other forms of support:
• Businesses in shared or flexible workspaces that do not have their own business rates
assessment
• Regular market traders with fixed on-going building costs and who do not have their
own business rates assessment at the market(s) they trade from
• Bed & Breakfasts which are liable for council tax instead of business rates
4.2 Furthermore, the Council recognises the significant contribution of charitable
organisations in supporting the health and well-being of residents and therefore wishes to
support the sustainability of the sector. The Government has identified that the following
types of properties should also be prioritised for distribution of the discretionary grant
fund where they have been ineligible for support under the schemes described in 2.6, and
this corresponds with the Council’s health and well-being priorities:
• Charity properties in receipt of charitable business rates relief
4.3 Only the types of businesses described in 4.1 and 4.2 will be eligible for phase 1 of the
Council’s discretionary grant scheme.
5. Income Losses
5.1 All applicants must be able to demonstrate that they have suffered a fall of 30% or more in
their normal expected levels of income during the period 24 March 2020 to 31 May 2020
inclusive and that this is due to the COVID-19 crisis. Evidence must include the most
recent set of business accounts, tax returns or bank statements.
Section B: Scheme Operation
The Scheme will operate in the following manner:
6. Grant award
6.1 The amount of grant awarded to eligible applicants will depend on the category of business
and the annual fixed on-going property costs associated with the business. Eligible costs
are limited to rent, mortgage payments and business rates.
Micro businesses
• Grant will be awarded on a sliding scale related to the annual fixed on-going property
costs of the business, up to a maximum of £10,000
Annual fixed on-going property cost Maximum grant awarded
Up to £1,000 £1,000
£1,001-£2,500 £2,500
£2,501-£5,000 £5,000
£5,001-£7,500 £7,500
Over £7,500 £10,000
Small businesses
• Fixed on-going property costs of £15,000 or less per annum, the grant will be £10,000
• Fixed on-going property costs of £15,001 or more up to a maximum of £50,099 per
annum, the grant will be £25,000
7. Applications
7.1 All applications must be submitted online through the specified application process hosted
on the Council’s website by Sunday 14 June 2020.
7.2 Only one application per business or per sole trader will be accepted. Multiple applications
from the same business, charity or sole trader will not be allowed.
7.3 All applications must contain the applicants Her Majesty’s Revenue and Customs (HMRC)
self-assessment number for sole traders or their relevant business HMRC registration
number or charity number for charitable organisations.
7.4 All applicants, if companies, must provide their Company Registration number.
7.5 All applicants, if VAT registered, must supply their VAT registration number.
8. Evidence and Proofs
8.1 All grant applications will need to be supported by appropriate evidence. The Council
reserves the right to ask for any evidence and proof it deems necessary and refusal to
cooperate and provide evidence and proofs reasonably requested, will result in a rejection
of the application.
9. Payments and Fraud prevention
9.1 The Council reserves the right to undertake any checks it considers necessary to prevent
fraudulent payments of grants.
9.2 Payments of the grant will be a one-off lump sum and will only be made direct into a UK
bank. Any bank details supplied will be subject to anti-fraud measures.
9.3 The Council will not accept any deliberate manipulation, misrepresentation or fraud. Any
business caught falsifying their records to gain grant monies will face prosecution and any
grant funding issued will be clawed back. Grants paid in error will also be subject to claw
back.
10. Exclusions
10.1 The following circumstances will render applicants ineligible for the scheme:
• Any applicant which is eligible for other Covid-19 support schemes and grants,
whether they have claimed them or not (this does not include payments made under
the Coronavirus Job Retention Scheme).
• Applicants that were not trading on 11 March 2020.
• Applicants not legitimately trading in accordance with all applicable laws, regulations,
local bye-laws and planning consent rules.
• Applicants not registered with HMRC or the Charity Commission.
• Applicants operating from home, other than bed & breakfast premises.
• Applicants that do not have ongoing, fixed annual rent, business rates or mortgage
payments.
• Where the property costs relate to domestic mortgage payments, other than those for
bed & breakfast premises.
• Applicants which occupy property, or part of a property, with a rateable value, annual
rent or annual mortgage payments above £51,000.
• Applicants that have not demonstrably suffered a fall of 30% or more in their normal
expected levels of income due to the Covid-19 crisis.
• Applicants, in particular market traders, who trade across county boundaries and who
have received a payment from another local authority under their respective grant
schemes.
• If an applicant has more than 49 employees, the grant will not be paid.
• Applicants that are in administration, insolvent, dormant or where a striking-off notice
has been made.
• If an applicant falls within the UK state aid rules concerning ‘Undertakings in
Difficulties’ on 31 December 2019, the grant will not be paid.
• Where payment of the grant will breach state aid rules.
11. State Aid
11.1 The United Kingdom left the European Union (EU) on 31 January 2020, nonetheless
under the Withdrawal Agreement the State aid rules continue to apply during a transition
period, subject to regulation by the EU Commission. The local authority must be
satisfied that all State aid requirements have been fully met and complied with when
making grant payments, including, where required, compliance with all relevant
conditions of the EU State aid De-Minimis Regulation, the EU Commission Temporary
Framework for State aid measures to support the economy in the current COVID-19
outbreak, the approved COVID-19 Temporary Framework for UK Authorities, and any
relevant reporting requirements to the EU Commission.
11.2 Local authorities have a discretion to make payments to eligible recipients under either
the De Minimis rules or the COVID-19 Temporary Framework for UK Authorities
(provided all the relevant conditions are met).
11.3 Payments of up to and including £10,000 will be provided under the De Minimis rules.
Applicants can receive up to €200,000 of state aid within a three year period.
11.4 Payments of up to and including £25,000 (or where the De Minimis threshold has been
reached) will be paid under the COVID-19 Temporary Framework for UK Authorities.
Recipients should note the conditions attached to the Temporary Framework, including
the €800,000 threshold per undertaking (€120 000 per undertaking active in the fishery
and aquaculture sector or €100 000 per undertaking active in the primary production of
agricultural products), and the requirement for recipients to declare they were not an
undertaking in difficulty on 31 December 2019. An ‘undertaking in difficulty’ is defined
by GBER (2014) as an undertaking in which at least one of the following circumstances
occurs:
a) In the case of a limited liability company (other than an SME that has been in
existence for less than three years), where more than half of its subscribed share
capital has disappeared as a result of accumulated losses. This is the case when
deduction of accumulated losses from reserves (and all other elements generally
considered as part of the own funds of the company) leads to a negative
cumulative amount that exceeds half of the subscribed share capital.
b) In the case of a company where at least some members have unlimited liability
for the debt of the company (other than an SME that has been in existence for
less than three years), where more than half of its capital as shown in the
company accounts has disappeared as a result of accumulated losses.
c) Where the undertaking is subject to collective insolvency proceedings or fulfils
the criteria under its domestic law for being placed in collective insolvency
proceedings at the request of its creditors.
d) Where the undertaking has received rescue aid and has not yet reimbursed the
loan or terminated the guarantee, or has received restructuring aid and is still
subject to a restructuring plan.
e) In the case of an undertaking that is not an SME, where, for the past two years:
i) The undertaking’s book debt to equity ratio has been greater than 7.5 and
ii) The undertaking’s EBITDA interest coverage ratio has been below 1.0.
11.5 Prepayment checks must include confirmation that, by accepting payments, recipients are
in compliance with state aid rules. The application process will require applicants to state
that, by accepting the grant payment, the business confirms that it is eligible for the grant
scheme, including that any payments accepted will be in compliance with state aid
requirements.
12. Appeals
12.1 There is no formal right of appeal if a grant application is not successful, however, the
applicant may ask for their case to be reviewed.
12.2 All reviews will be undertaken by independent senior officers of the council who have
not been involved in assessing the original application. The outcome of each review will
be authorised by a Director of the Council.
12.3 All applicants who have requested a reconsideration will be formally notified of the
outcome.
Section C: Data Protection and Anti-fraud measures
13.1 We will use your information to assess your application for a grant. We will confirm
information about you and your account with both the Government and credit
referencing agencies. We will do this to ensure that the details you give are correct and
that your identity is valid.
13.2 If you provide false or inaccurate information, we will record this. We and other fraud
prevention agencies may use and search these records to prevent fraud and money
laundering.
13.3 The Council and the Government will not accept deliberate manipulation and fraud. Any
business caught falsifying their records to gain grant money will face prosecution and any
funding issued will be subject to claw back.
13.4 To minimise the risk of fraudulent grant claims, the Council’s Fraud Investigation Team
will carry out anti-fraud checks which may include use of the Government’s ‘Spotlight’
tool. We may use data provided by third parties in undertaking verification of claims,
such as data provided through the National Fraud Initiative, and we may use third parties
to check data received, such as the National Anti-Fraud Network (NAFN). We will store
this information electronically and will share it with other Council Officers who may be
involved in considering your grant.
13.5 The Council is compliant with the Data Protection Act 2018 and is complaint with all its
obligations under the General Data Protection Regulation.
13.6 All data collected will be stored in accordance with the law and will destroyed in-line with
the Council’s data retention policy

Please see website for further details and to apply